Shuaa Capital has completed a large land acquisition in Saudi Arabia on behalf of its SR2 billion (€390 million; $533 million) Shuaa Hospitality Fund, the first purchase of its kind by a hospitality fund, it claimed.
The land was acquired with a view to developing it into a luxury hotel tower and apartments, near Jeddah, totaling 40,000 square metres. A purchase price was not disclosed although the cost of developing the scheme is expected to reach SR 500 million. When completed, the hotel will be managed by Rotana, which has a large presence in the sector in the Middle East.
Shuaa described Jeddah as a strategic investment area and is attracted to investing in the region because of its favorable demographics. According to the firm, Jeddah, with a population of more than 3.4 million people had a hotel occupancy rate of 77 percent in 2009. It added that the number of travelers to Jeddah International Airport increased by 9.2 percent between 2004 and 2008.
Omar Al Jaroudi, chief executive officer of Shuaa Capital Saudi Arabia said: “The Shuaa Saudi Hospitality Fund is at the core of our private equity platform. Our goal is to start developing the property at the fastest pace possible.”
Selim El Zyr, president and chief executive officer of Rotana, said: “Demand for available hotel rooms significantly outstrips supply to the background of a booming travel and tourism industry.”